Listed Mining Companies
TORONTO (miningweekly.com) – The board of Anglo American has unanimously rejected a proposal from rival Xstrata Plc that the companies consider a “merger of equals”, Anglo said on Monday.
“The strategic case for the combination is unattractive for Anglo American shareholders.
“Irrespective of this lack of strategic merit, the terms proposed by Xstrata were totally unacceptable,” Anglo said in a statement.
A combination with Xstrata would “profoundly impact the nature of the group's portfolio by significantly diluting Anglo American’s unique exposure to the structurally attractive platinum, iron ore and diamond markets while increasing exposure to nickel and zinc”.
Anglo American controls the world's biggest platinum miner, Anglo Platinum, and holds a 45% stake in diamond giant De Beers, as well as almost 70% of South African iron-ore producer Kumba Iron Ore.
“In reaching its view the board has also had particular regard to the comparative quality and life of the producing assets and the growth to be delivered from the respective project portfolios of the two companies,” Anglo said.
The miner said its board “regularly” reviews its strategic alternatives, including the rationale for a merger with Xstrata.
On Sunday, Xstrata confirmed that it had asked the Anglo board to consider a “merger of equals”.
The group said that it had quantified substantial operational synergies that would not be available to either company operating alone.
In addition, Xstrata believed that the combined entity's organic growth programmes could be reprioritised to enhance shareholder returns.
